The end of the year brings new opportunities for next year. However, keep in mind that there is more work to be done right now. Some of these opportunities may spill over into next year, too. Taxes are coming. However, if you take a few minutes right now to consider any deductions you may be entitled to, you may be able to reduce the amount of tax you owe to the IRS. This is an excellent way for individuals to save money. In some cases, you are getting more back, too.
What Dedications Can You Take?
You do want to work with a tax professional who is willing to spend a bit of extra time with you right now (and there are many that will) to help you to minimize your tax liability. The following are a few of the tax deductions many people can take. Whether you qualify for them or not is determined through your tax professional.
- Tally up your medical expenses. However, you do have to reach a specific limit, if you have been putting off a procedure or a doctor’s visit that would qualify, do it now. If you have spent enough on medical costs, you can deduct them. This includes things like crutches, hearing aids, contact lenses, medications and even prescription glasses.
- Job seeking expenses may be a deduction. Tax code allows for any costs associated with locating a job to be included as a tax deduction. This cannot be your first job out of college and there are a few other qualifications. However, those who have spent a lot on travel expenses or other needs may be able to take advantage of this.
- The small business owner has plenty of tax discounts available to them. Did you keep track of your mileage for business use? Do you use your cell phone for business transactions? Are you factoring in half of the self-employment tax paid as a deduction? Do you need specialized clothing not suitable to wear outside of the work place? Did you invest equipment into your business? These are all deductions you may qualify for.
- Deduct gambling losses up to the amount of your gambling wins. You do have to have some proof of these losses to qualify for them.
- Have you donated significant value to charities? If not, now is the perfect time to do so. Donate that car you do not use. Donate old items around the home. Get a receipt. Do take into consideration monetary donations as well. These all help you at tax time and do help those in need at the same time.
In addition to these tax deductions, do check out your investments. Have you invested as much as you can for the year? For those under 50 years of age at the end of the year, you can contribute as much as $5000 or the amount of your taxable compensation in 2009. For those over the age of 50, you can contribute $6,000 or the amount of your taxable compensation. Both of these go into your traditional or Roth IRA. If you have not contributed enough, now is the time to do so.
Saving money just makes sense. There is no reason for you to put more money into your taxes than is necessary. In fact, now is a good time to access just how much money you are giving to the government out of each check. If you are getting a refund, remember that this is simply an interest free loan you are giving to the government. Adjust your withholdings to ensure this does not happen.